Lee Iacocca is the son of immigrants of Italian origin. He grew up in Allentown, Pennsylvania with his sister.
The incredible part of Iacocca’s life story was he was able to work his way up from a student engineer to President of Ford Motor Company. I have also written articles on the life story of Muhammad Ali, Martin Luther King, Jr., Phil Knight, Malcolm X, Nelson Mandela and Mahatma Gandhi. Feel free to read these as well.
In addition, I have also written a post that summarises 7 greatest life lessons from 7 successful leaders listed above. Feel free to click the previous link and explore this article.
On July 13, 1978 he was fired at the age of 54 from Ford. His birthday was his last day at Ford. He later went to head Chrysler which was on the brink of bankruptcy. The recovery of Chrysler under the leadership of Iacocca is one that every business student should read.
Iacocca died on July 2nd, 2019 due to complications with Parkinson disease.
The following are 15 practical lessons that stuck out to me from the career and life of Lee Iacocca.
Fundamental pre-college skills
Iacocca identified three skills as important that he had prior to entering college. These are reading, writing and public speaking.
“By the time I was ready for college, I had a solid background in the fundamentals: reading, writing and public speaking. With good teachers and the ability to concentrate you can go pretty far with these skills “(p. 18).
College taught Iacocca how to manage his time. In college he worked hard during the week while leaving the weekend free for family and recreation.
On Sundays he made a schedule for what he needed to accomplish the following week. He used this schedule during college and when he entered the workplace.
“I’m constantly amazed by the number of people who can’t seem to control their own schedules. Over the years, I’ve had many executives come to me and say with pride: “Boy last year I worked so hard that I didn’t take any vacation.” It’s actually nothing to be proud of” (p.20).
The Need to Focus
Iacocca expressed that his ability to concentrate was one of his assets which he developed at college.
“The ability to concentrate and to use your time well is everything if want to succeed in business- or almost anywhere else, for that matter” (p.20)
If you want to make good use of your time, you’ve got to know what’s most important and then give it all you’ve got” (p.20).
The Value of Mistakes
Iacocca recalled his journey to refining his skills as a salesman.
“Learning the skills of salesmanship takes time and effort. You have to practice them over and over again until they become second nature. Not all young people today understand that. They look at a successful businessman and they don’t stop to think about all the mistakes that he might have made when he was younger. Mistakes are a part of life; you can’t avoid them. All you can hope is that they won’t be too expensive and that you don’t make the same mistake twice” (p.32).
Dealing with setbacks
In the 1950’s Ford made some cut backs and he was demoted which made him miserable.
Iacocca response was:
“But if you really believe in what you’re doing, you’re got to persevere even when you run into obstacles. When I finished sulking, I doubled my efforts and worked even harder. In a few months, I had my old job back. Setbacks are a natural part of life, and you’ve got to be careful how you respond to them. If I had sulked too long, I probably would have got myself fired” (p.38).
The Importance of Rehearsals
In 1956, Ford introduced safety features. Iacocca wanted to demonstrate how the safety padding worked to a group of 1100 men. He climbed up on a ladder with a tray of eggs to show how the safety padding worked. Only at the fifth attempt was the desired impact achieved.
Iacocca described two lessons learnt from this experience:-
“First never use eggs at a sales rally. And second never go before your customers without rehearsing what you want to say- as well as what you’re going to do- to help sell your product” (p.39).
Put all ideas on paper
This is one of the lessons that Iacocca learnt from one of his bosses whose name was Mc Namara. He described Mc Namara as someone who will review every scenario before making a decision.
Before any major decision is made, Mc Namara would require that he does home and put the idea on paper. If he was unable to complete this, then it means that the idea was not well taught out.
This impacted his leadership style and stated:
“I don’t want anybody to sell me a plan just by melodiousness of his voice or force of personality. You really can’t afford that” (p.43).
The Key in Management
He described the one key to management is to asking his team to write down their goals. The discipline of writing down goals is the first step to making things happens.
Based on the stock exchange requirement for quarterly reporting, goal setting was required once per quarter from his team.
Iacocca would ask:
“What are your objectives for the next ninety days? What are your plans, your priorities, and your hopes? And how you intend to go about achieving them” (p.47).
Iacocca described this quality as the most important one to have as a manager. He believed in taking risks but scenarios must be supported by facts.
“Despite what textbooks say, most important decisions in corporate life are made by individuals, not by committees. My policy has always been to be democratic all the way to the point of decision. Then I become the ruthless commander” (p.52).
Iacocca valued working together with others in order to solve problems.
“The best way to develop ideas is through interacting with your fellow managers. This brings us back to the importance of teamwork and interpersonal skills. The chemistry among two or three people sitting down together can be incredible- and it’s been a big part of my own success” (p.59).
After been fired from Ford, Iacocca moved to Chrysler, there were several signs that he looked at which told him that the operations were in a rough shape during the first couple of weeks.
“Before the day was over, I noticed a couple of seemingly insignificant details that gave me pause. The first was that the office of the President where Cafiero worked, was being used as a thoroughfare to get from one office to another. When the secretaries are goofing off, you know the place has dry rot” (p.152)
Blessings in Disappointments
Iacocca’s wife Mary was a major source of strength and support for him. After the firing at Ford she said to him:
“The Lord makes everything turn out for the best. Maybe being fired from Ford is the best thing that ever happened to you” (p.286).
Always think in terms of the other person’s interest
During the Chrysler crisis, Iacocca made the decision to go to Congress for financial assistance. He argued about the impact that the loss of Chrysler will have on jobs and also the automobile industry.
However, the most important case that was built was the costs to the Government if Chrysler went under.
Iacocca explained to Congress:
“You guys have a choice. Do you want to pay the $2.7 billion now, or do you want to guarantee loans of half that amount with a good chance of getting it all back? You can pay now or you can pay later” (p.208).
Die Quietly or Die Screaming
During the Chrysler financial crisis period, the highest priority of the business was to maintain consumer confidence. During this period, there was considerable decline in sales and public relations were debating how to respond.
One school of thought believed that they should sit tight and ride the wave. Another school of thought stated that they should let the public know about their situation.
They chose the latter. The Public relations company- Kenyon & Eckhardt called it die screaming. Using this approach opens up the option that someone will hear you.
“The ads were unusually straightforward and frank. We knew all too well what the man on the street was thinking about Chrysler, so we tried to put ourselves in his place and anticipate his questions and doubts. There was no point in ignoring the bad press. Instead we had to meet it head on and replace rumors with the facts” (p.222).
Equality of Sacrifice
Iacocca made a bold move during the Chrysler crisis when he reduced his salary to $1. He explained that leadership means setting an example.
“When you find yourself in a position of leadership, people follow your every move. When the leader talks, people listen and when the leader acts, people watch. I didn’t take the $1 a year to be a martyr. I took it because I had to go into the pits. I took it so that when I went to Doug Fraser, the union president, I could look him in the eye and say: Here is what I want from you guys as your share. He could not come back to me and say, what sacrifice have you made” (p.229).
The autobiography of Lee Iacocca in my option is a must read for business students and young professionals.
It details his career and life journey from being an engineer trainee to a salesman at Ford to his rise to Presidency to his firing to his time working at Chrysler. This book is definitely one that I want to read again.
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